Apple shares will surge 20% after its stock split, according to this analyst. Is he right?

More gains could lie ahead for the tech titan's investors.

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This article was originally published on All figures quoted in US dollars unless otherwise stated.

Apple's (NASDAQ: AAPL) gains so far in 2020 have electrified investors. Despite beginning the year with a market valuation of more than $1.2 trillion, the technology giant's stock has surged 70%, creating fortunes for its shareholders along the way. 

And yet, one analyst believes Apple shares are set to move even higher following its upcoming stock split.

On Wednesday, Wedbush analyst Daniel Ives reiterated his outperform rating on Apple and boosted his price forecast from $515 to $600. His new target price represents potential gains of roughly 20% for investors, based on shares' current price near $500. 

Ives sees as many as 350 million people upgrading to Apple's upcoming iPhone 12 model – which is expected to include much-awaited fifth-generation (5G) wireless technology – over the next 18 months. The analyst says this iPhone supercycle is a "once in a decade" profit opportunity for Apple – one that many investors are not yet fully appreciating.

Will Apple's shares continue to surge after its stock split? 

If iPhone 12 sales blow away expectations, as Ives predicts, then Apple's stock will likely climb to $600 – and potentially even higher – in the year ahead. The iPhone is, of course, Apple's most important product, and new phone sales tend to also boost sales of apps and services, all of which could help to drive profits sharply higher.

Apple's upcoming stock split could also help to fuel a rise in its share price. Despite the fact that a stock split does not alter the fundamental value of a business, many investors do get excited about the opportunity to buy more shares at a lower price. 

For these reasons, Apple's stock could approach Ives' $600 pre-split ($150 post-split) target price much sooner than many investors currently expect.

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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